The RealReal Stock

The RealReal, Inc. operates an online marketplace for authenticated, resale luxury goods.

The company provides an end-to-end service that unlocks supply and creates a trusted, curated online marketplace for buyers globally.

The company offers a wide selection of authenticated, primarily pre-owned luxury goods on its online marketplace bearing the brands of thousands of luxury and premium designers. The top-selling luxury designers on its online marketplace include Cartier, Chanel, Christian Louboutin, Gucci, Hermès, Louis Vuitton, Prada, Rolex, Tiffany & Co. and Valentino. The company offers products across multiple categories, including women’s fashion, men’s fashion, jewelry and watches.

The company also operates retail stores, including its larger footprint flagship stores, or Flagship Stores, in Los Angeles, California and New York, New York. The company’s Flagship Stores are typically 8,000 to 12,000 square feet with thousands of unique items for sale and are located in highly desirable, densely populated locations with strong foot traffic. In addition, the company operates several smaller footprint neighborhood retail stores, or Neighborhood Stores. The company’s Neighborhood Stores are typically 1,800 to 3,500 square feet with items for sale reflecting a selection of its online assortment and are located in areas it has identified as having a large amount of potential customers.

Consignors

The company’s sales professionals remove friction from the consignment process and build lasting relationships with its consignors. In 2022, approximately 83% of the company’s gross merchandise value (GMV) came from repeat consignors. The company’s unique service model incentivizes consumers to consign by making the process easy.

The company’s sales and service organization is responsible for obtaining exclusive supply for its online marketplace and retail stores. The company’s sales professionals generate a robust pipeline of new consignors and build lasting relationships, which cannot be easily replicated. They consult on the consignment process and leverage data to advise consignors on pricing, expected selling time and market trends.

The company removes friction from the consignment process by providing multiple consignment methods. It offers concierge at-home consultation and pickup, and virtual consultations with consignors via online face-to-face platforms. Consignors may also drop off items at the company’s luxury consignment offices. The company’s Flagship and Neighborhood Stores provide an alternative location to drop off consigned items and an opportunity to interact with its authentication experts.

Once consigned items reach one of the company’s four authentication centers, it authenticates, writes the associated copy, photographs, prices, sells and handles all fulfillment and returns logistics, making the consignment process seamless.

The company’s scale and global reach combined with its technology-driven online marketplace and proprietary data enable consignors to realize optimal value for their pre-owned luxury goods. In November 2022, the company launched a pricing tool for its consignors that provides transparency and detail on commission rates for specific categories and other aspects of the take rate structure.

The company’s consignors are generally paid after an item has sold. However, it also offers trade-in terms and ‘Get Paid Now’ options to both businesses it purchases items directly from and individuals who consign their items with it. ‘Get Paid Now’ is a program whereby items are evaluated, authenticated, and priced and the business or consignor receives payment based on this process in advance of the sale of the item.

The company’s online marketplace efficiently matches supply with demand resulting in sales velocity of approximately 58% of the products on its online marketplace sold within 30 days, in 2022.

Buyers

The company makes it easy for buyers to shop its vast, yet curated selection of authenticated, primarily pre-owned luxury goods. In 2022, the company had approximately 1 million active buyers and approximately 84% of its GMV came from repeat buyers.

Buyers access the company’s omni-channel online marketplace through its website, mobile app and retail stores, enabling them to purchase anytime, anywhere. The company’s Flagship and Neighborhood Stores also offer its buyers a sophisticated shopping experience, in a beautifully designed space, where they can shop its dynamic curation of authenticated pre-owned luxury goods across all of its categories.

The company continues to invest and innovate in authentication, both in its people and its technology. The company has the most rigorous authentication process in the resale luxury goods marketplace. It has highly trained gemologists, horologists, brand experts and art curators who collectively inspect thousands of items each day. All items pass through a rigorous brand-specific authentication process before they are accepted for consignment. This process includes, among other things, inspecting the item for attributes, such as appropriate brand markings, date codes, serial tags and hologram stickers. In 2022, the company implemented proprietary AI microphotography to assist in authenticating high-end handbags. The company’s gemologists and horologists inspect and authenticate fine jewelry and watches, and each piece it sells comes with an authentication certificate. The company has a zero-tolerance policy when it comes to counterfeit goods. Items that are deemed to be counterfeit are removed from the company’s authentication centers.

The company provides buyers with access to a vast, yet curated selection of unique, authenticated, pre-owned luxury goods. In 2022, the company sold goods bearing the brands of thousands of luxury and premium designers, including highly coveted items, such as rare watches and handbags.

The company is expanding the overall market for both new and pre-owned luxury goods, as the ability to experience and engage with luxury brands through its online marketplace results in an earlier appreciation for high-quality, well-crafted items, and inspires consumers to purchase new luxury items. As of December 31, 2022, the company had partnerships with Stella McCartney, Jimmy Choo, Nanushka, 11Honore and Beckett Collectibles, and its online marketplace cultivates customer relationships for luxury brands.

Seasonality

Historically, the company has observed trends in seasonality of supply and demand in its business. Specifically, its supply increases in the third and fourth quarters, and its demand increases in the fourth quarter. As a result of this seasonality, the company typically sees stronger average order value (AOV), and more rapid sell-through in the fourth quarter (year ended December 2022). The company also incurs higher operating expenses in the last four months of the year as it increases advertising spend to attract consignors and buyers and increases headcount in sales and operations to handle the higher volumes from increased demand.

Intellectual Property

The company’s principal trademark assets include the registered trademark ‘The RealReal’ and its logos and taglines.

The company also holds the rights to the ‘therealreal.com’ Internet domain name and various related domain names, which are subject to Internet regulatory bodies and trademark and other related laws of each applicable jurisdiction.

History

The RealReal, Inc. was founded in 2011. The company was incorporated in the state of Delaware in 2011.